N.L.R.B. v. Houston Distribution Services, Inc.

• Decision Date: 19 May 1978
• Docket Number: No. 77-1486,77-1486
• Citation: 573 F.2d 260
• Parties: 98 L.R.R.M. (BNA) 2538, 83 Lab.Cas. P 10,613 NATIONAL LABOR RELATIONS BOARD, Petitioner, v. HOUSTON DISTRIBUTION SERVICES, INC., and Southwest Warehouse Service, Respondents.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 260

573 F.2d 260

98 L.R.R.M. (BNA) 2538, 83 Lab.Cas. P 10,613

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. HOUSTON DISTRIBUTION SERVICES, INC., and Southwest Warehouse Service, Respondents.

No. 77-1486.

United States Court of Appeals Fifth Circuit.

May 19, 1978.

Elliott Moore, Deputy Associate Gen. Counsel, Paul J. Spielberg, Supervisor, Vivian A. Miller, Atty., John S. Irving, Gen. Counsel, John E. Higgins, Jr., Deputy Gen. Counsel, Carl L. Taylor, Assoc. Gen. Counsel, N.L.R.B., Washington, D. C., for petitioner.

David T. Maddox, Robert T. Sabom, Houston, Tex., for respondents.

Application for Enforcement of an Order of the National Labor Relations Board.

Before THORNBERRY, GOLDBERG and CLARK, Circuit Judges.

THORNBERRY, Circuit Judge:

This is an application by the National Labor Relations Board for enforcement of its order issued against Houston Distribution Services, Inc. (Houston Distribution) and Southwest Warehouse Services, Inc. (Southwest). The Board found that the respondent, a single employer consisting of the two companies, violated Sections 8(a)(3) and (1) of the National Labor Relations Act, 29 U.S.C. § 151 et seq., by refusing to hire three employees formerly employed by its predecessor, Shipper's Transportation & Storage, Inc. (Shipper's), and by discharging four employees in order to avoid bargaining with the Union. ¹ The Board further found that the respondent was a successor employer and that a majority of its employees in an appropriate unit had designated the Union as their collective bargaining representative and that the respondent had refused to bargain with the Union in violation of Sections 8(a)(5) and (1) of the Act. The Board's decision and order is reported at 227 N.L.R.B. No. 152 (1977). We grant enforcement.

I.

Southwest complains that the Board proceeded against it without a charging party ever naming Southwest. Southwest contends that the Board's action is in violation of 29 U.S.C. § 160(b) which requires the Board to issue a complaint pursuant only to a charge made by a charging party. ²

The original charge named Houston Distributing and the Board issued a complaint against it. At the hearing before the Administrative Law Judge (ALJ), it was discovered that although the employees thought they worked for Houston Distribution, the actual employer was Southwest. ³ After this became apparent, the ALJ amended the complaint to include Southwest.

While Southwest does not contend that the ALJ is without power to amend the complaint, it urges that the ALJ cannot do so without an underlying charge specifically naming Southwest. As Southwest correctly points out, the Board is without power to initiate a proceeding without benefit of an underlying charge, NLRB v. Indiana & Michigan Elect. Co., 318 U.S. 9, 63 S.Ct. 394, 87 L.Ed. 579 (1943); NLRB v. Westex Boot & Shoe Co., 190 F.2d 12, 13 (5 Cir. 1951); however, the charge when made is not to be strictly construed. In Texas Industries, Inc. v. NLRB, 336 F.2d 128, 132 (5 Cir. 1964), we said:

It is established that this section precludes the Board from issuing a complaint on its own initiative and that a charge is a prerequisite to the institution of proceedings before the Board. N.L.R.B. v. Kohler Co., 7 Cir. 1955, 220 F.2d 3. However, the charge is not a formal pleading, and its function is not to give notice to the respondent of the exact nature of the charges against him. N.L.R.B. v. Fant Milling Co., 1959, 360 U.S. 301, 79 S.Ct. 1179, 3 L.Ed.2d 1243; Consumers Power Co. v. N.L.R.B., 6 Cir. 1940 We do not believe that the addition of the correct corporate entity is so completely outside the original charge that the Board could be said to have initiated a proceeding of its own motion. The distinction is between the total absence of a charge and a charge made, although not perfect in every particular. Workingmen are not required to wander the maze of corporate structure.

113 F.2d 38. This is the function of the complaint. The charge rather, serves merely to set in motion the investigatory machinery of the Board. It is largely for the benefit of the Board, not the respondent, so that it may intelligently determine whether and to what extent an investigation is warranted. Consequently, the Board has considerable leeway to found a complaint on events other than those specifically set forth in the charge, the only limitation being that the Board may not get 'so completely outside * * * the charge that it may be said to be initiating the proceeding on its own motion * * *.' N.L.R.B. v. Kohler Co., supra. See also N.L.R.B. v. Reliance Steel Products Co., 5 Cir. 1963, 322 F.2d 49; N.L.R.B. v. Raymond Pearson, Inc., 5 Cir. 1957, 243 F.2d 456.

II.

The respondent next brings forward the obligatory substantial evidence point and an objection concerning the proper test to be applied in refusal to hire cases.

REFUSAL TO HIRE

Gary R. Stillwell is the owner of Southwest which in turn owns Houston Distribution. Stillwell was in the moving and storage business until April 1974 at which time he sold the moving part of his business and remained in the storage business. He operated Southwest which had two employees and was non-union. Stillwell was also a consultant for Weingarten Realty which owned Shipper's. Weingarten desired to sell its interest in Shipper's and Stillwell formed a new company, Houston Distributing, to take over Shipper's operation. Shipper's had approximately twenty-five employees and all were told that applications for employment would be available on February 3. Stillwell also ran a newspaper advertisement seeking qualified employees. Shipper's former employees were union members.

Nine former Shipper's employees were hired by Southwest. Six new employees were also hired. Former Shipper's employees Eugene Plater, Emmett Lewis, and Phillip Ware were not hired. The Board found that these men were not hired because of union animus.

THE PROPER BURDEN OF PROOF

The respondent urges that the Board used the wrong standard in ascertaining the burden of proof in refusal to hire cases. The respondent insists that the only issue which the Board should have addressed was whether the failure to hire the three former employees was "solely" because of their affiliation with the Union. In Howard Johnson Co., Inv. v. Hotel Employees,417 U.S. 249, 94 S.Ct. 2236, 2243 n.8, 41 L.Ed.2d 46 (1974), Mr. Justice Marshall stated, "Thus, a new owner could not refuse to hire the employees of his predecessor solely because they were union members or to avoid having to recognize the union."

We do not think this comment was an attempt to formulate a test for burden of proof in successorship cases. Rather, this is a clear example of impermissible conduct on the part of a successor employer. We do not think that quotation from Howard Johnson addressed the case in which the employer had both permissible and impermissible motives in refusing to hire a predecessor's former employees. Indeed, after citing with approval two cases, neither of which adopts a "sole motivation" test, Mr. Justice Marshall further states, "There is no suggestion in this case that Howard Johnson in any way discriminated in its hiring against the former Grisson employees because of their union membership, activity, or representation." Id.

If the Board were to find for the employees only when union animus is the sole reason for the refusal to hire, the Board could seldomly be upheld. We believe that the Board's task in these cases is to find substantial evidence of union animus. NLRB v. Foodway of El Paso, 496 F.2d 117, 119 (5 Cir. 1974); K. B. & J. Young's Super Markets v. NLRB, 377 F.2d 463 (9 Cir.), cert. denied, 389 U.S. 841, 88 S.Ct. 71, 19 L.Ed.2d 105 (1967); Tri State Maintenance Corp. v. NLRB, 132 U.S.App.D.C. 368, 408 F.2d 171 (1968).

SUBSTANTIAL EVIDENCE

We are persuaded that the Board's conclusion that the three former workers were not hired as a result of a plan to avoid dealing with the Union is supported by substantial evidence.

While it is plain that Southwest was under no obligation to hire the entire workforce of Shipper's, Tri State, supra, 132 U.S.App.D.C. at 370, 408 F.2d at 173, or to hire exclusively from the pool of former workers, we think that Southwest's behavior toward this pool gives the Board adequate reason to hold that Southwest refused to hire the three employees in furtherance of a plan to avoid bargaining with the Union. First, it is undisputed that Stillwell was concerned about the employee quality at Shipper's warehouse. Given the twenty-five former workers to choose from, good business judgment would dictate that Southwest hire only the best workers from Shipper's. Nevertheless, Southwest never inquired about the quality of the workers, even though such inquiry could have easily been made. Second, the reasons advanced by Southwest for not hiring the three men justify the Board in imputing bad motive to Southwest. Southwest contends that Plater, Lewis, and Ware were rejected out of hand because they could not report to work immediately, their applications were either incomplete, ambiguous about the job sought, or without indications of previous warehousing experience. Although their applications disclose that they were all willing to report for work no later than February 4, others similarly situated obtained employment from Southwest. The Southwest hiring agent knew that all of the applications were made by former Shipper's employees and that Shipper's had employed only warehousemen. It is therefore inconceivable that the hiring agent did not know that the potential employees were all experienced warehousemen regardless of any ambiguity in their applications. Furthermore, the agents made no attempt to question any of the applicants about their job history, skills, or job preference. We think that the Board was supported by substantial evidence on the record taken as a whole. ⁴

DISCHARGE OF FOUR EMPLOYEES

It is settled that an...